New rules on Fixed Medical Allowance for NPS pensioners: How payments will work

The government has outlined a payment framework for Fixed Medical Allowance (FMA) to pensioners and family pensioners covered under the National Pension System (NPS), with a fresh Office Memorandum issued by the Central Pension Accounting Office (CPAO).

The move standardises how eligible retirees receive medical support, shifting the process toward automated, bank-led disbursal and reducing paperwork for beneficiaries.

How the new system works

Under the updated modalities, FMA payments will be routed through pension disbursing banks via their Central Pension Processing Centres (CPPCs). After verification, CPAO will issue a Special Seal Authority (SSA) to the concerned bank, authorising payment.

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Once the SSA is received, banks will directly credit the allowance into the pensioner’s account on a quarterly basis, at rates notified by the Department of Pension and Pensioners’ Welfare from time to time.

A key change is that no separate bill submission is required from pensioners. Payments will be automatic, based on government instructions and the SSA.

Compliance and continuity requirements

To continue receiving FMA, pensioners must submit a life certificate annually in November—either digitally or physically. Payments for September to November will be released in early December, while further disbursals will depend on timely submission of this certificate.

In case a beneficiary opts to switch from FMA to CGHS (OPD) facilities, existing government rules on such transitions will apply.

What happens in special cases

Account transfers: If a pension account shifts between branches or banks, the existing CPAO pension scheme guidelines will govern the process.

After a pensioner’s death: If an eligible family member is already listed in the FMA authority, banks can begin payments upon submission of a death certificate. If not, a fresh authority must be obtained through the concerned office.

Financial and administrative impact

The government will reimburse banks for FMA payments under the current system, while CPPCs will handle accounting and reporting requirements.

For pensioners, the changes aim to simplify access to medical allowance, ensure timely payments, and reduce administrative hurdles. For banks, the framework formalises their role in pension-linked benefit delivery.

Further technical instructions on system integration between CPAO and banks are expected separately.

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